The future for electric car startup tech is in China

Money from Chinese investors, conglomerates, cities and the government, continues to drive a significant amount of the future of next-generation technology for electric cars. On Tuesday a company called Protean Electric, which makes an electric vehicle drive system, announced that it has raised a whopping $84 million round from GSR Ventures, a VC firm based in Beijing and Silicon Valley, New Times Group, a Liyang, China-based industrial group, and the city of Liyang. The funds will go toward building a factory for Protean Electric’s drive systems in Liyang.

China is already the world’s largest auto market, so it’s not that surprising that it would lead on electric vehicle technology development, too. As the Financial Times once put it: “The Middle Kingdom is increasingly claiming its place as the centre of gravity of the automotive world.”. . . “This is a 30m market by 2020 – it will be the dominant market in the world.”

Protean’s technology is an electric motor that is housed within a vehicle’s wheel and can be used for hybrid, plug-in hybrid and electric cars. Protean says the motor system reduces complexity, adds torque and increases power.

Chinese investors, and city governments, have been very aggressive when it comes to offering auto technology and battery companies incentives, and easy access to capital, if they manufacture in China. Particularly startups that haven’t been able to raise funds from investors or the government in the U.S., are eager to make these deals. Here’s examples of some of these:

Battery maker Boston Power lined up $125 million in funding from Chinese investors and the government to shift a big part of its business to China and thin its operation in the U.S. by about 35 percent. Boston Power makes lithium ion batteries that it plans to sell for the electric vehicle market.

Electric car company, Coda Automotive, created a joint venture with Chinese battery maker, Lishen, in 2010 and is backed by Chinese investors. Coda also recently announced a deal with auto maker Great Wall Motors Company to co-develop a low cost electric car to sell in the U.S., China and Europe.

San Diego-based battery company PowerGenix spent the past year hunting for a partner in China and created a joint venture with China City Construction Corp. to produce its batteries for the so-called microhybrid vehicles. PowerGenix already had a research facility with a small production line in the southern Chinese city of Shenzhen.

Smith Electric Vehicles early this year announced a $25 million equity investment from the Wanxiang Group, and a letter of intent for a $75 million investment in a JV between Smith and Wanxiang to make electric school buses and commercial vehicles.

Electric motorcycle maker Brammo says it’s scored a deal to supply the Hong Kong government and police force with its electric motorcycles. Brammo says the Hong Kong government will replace its existing gas-powered motorcycle fleet with Brammo’s Enertia.